The key findings:
- Surveyors say the market is continuing to stabilise, but recovery is likely to be uneven with prime assets expected to outperform secondary stock
- Offices lead the way with prime office rents forecast to rise by an average of 6% and capital values by average of 4% over the next 12 months
- Industrial asset rents are projected to increase by an average of 4% and capital values by 3% - for prime retail the respective figures are 3% and 2%
- 57% regard market prices as fair value while 38% view it as expensive or very expensive
- Three out of four respondents believe occupiers are willing to pay more for health and wellbeing features
- “This trend has been the most profound development in recent surveys as it further broadens the market divide between primary and secondary assets”
Chartered commercial and valuation surveyors are predicting a rise in rents and capital values across prime commercial property asset types over the next 12 months as the market continues to stabilise. They say the finding of a major new report indicate the market is moving towards a more sustainable growth phase following the volatility experienced in recent years.
But they say the recovery is likely to remain uneven, with prime assets expected to outperform secondary stock; and they warn that the supply of commercial property generally remains constrained as available space continues to decline, and development activity remains subdued across major cities.
The Society of Chartered Surveyors Ireland Mid-Year Commercial Property Market Monitor 2026 found that occupier demand for building based on Environmental, Social and Governance principles (ESG) is a key driver of demand with three out of four respondents reporting that tenants are prepared to pay a premium for buildings that offer strong ESG and workplace credentials.
The report forecasts that national average rents for prime offices will rise by 6% over the next 12 months while capital values will increase by 4%.
Surveyors expect rents and capital values for prime industrial assets to increase by 4% and 3% respectively, while they forecast that the rent of prime retail assets will increase by 3% and their capital values by 2%.
Market Overview
Bernadine Hogan, chair of the Commercial Agency Committee, says that despite heightened geopolitical uncertainty, SCSI agents anticipate improving market conditions.
“Across the commercial property market, the first half of 2026 has been characterised by growing occupier confidence and a gradual recovery in investment activity. The combination of positive investment enquiries and limited availability suggests that investors remain interested in opportunities where asset fundamentals are strong.”
“Fifty-seven per-cent of respondents to our survey regard market prices as fair value while 38% view it as expensive or very expensive. In addition, almost half of participants (49%) believe the market is in early recovery or mid upturn.”
“The vast majority of respondents – 96% anticipate increased tenant demand for health and well-being features in commercial buildings. Furthermore, 75% expect occupiers to be willing to pay more for these facilities, highlighting the growing importance of workplace experience, sustainability and employee well-being in occupier decision making
“This trend has been the most profound development in recent surveys, as it further broadens the market divide between primary and secondary assets on the Irish commercial market. Properties offering strong occupational fundamentals, sustainability credentials and long-term income security are expected to outperform.
“The positive sentiment recorded in Ireland mirrors findings from the latest RICS Global Commercial Property Monitor, which ranks Ireland among the stronger-performing European commercial property markets, with sentiment improving further during Q2 2026.”
“However, our survey also highlights supply constraints as one of the defining challenges facing the commercial property market, with development viability being a major concern. CSO figures show the volume of non-residential building output fell 12% year on year in Q1 2026.”
“Higher construction costs, financing costs and planning delays have slowed the commencement of new projects. While some schemes are progressing, the development pipeline remains relatively shallow, particularly in the industrial sector” Hogan says.
Sectoral Analysis
For prime office assets, 75% of surveyors expect rental values to increase while 63% expect capital values to rise. Expectations for secondary offices remain more cautious as nearly half the respondents foresee no change in rental or capital values, highlighting the continued polarisation within the office market.
A similar pattern is evident across industrial and retail assets. For prime industrial 76% expect positive rental values to increase while 66% expect capital values to rise. However, for secondary industrial 51% say capital values will remain unchanged while 46% believe rents will remain the same.
Hogan says that while industrial and logistics assets continue to attract positive expectations, the level of increase looks set to ease.
“Expectations for future growth in rents and capital values of industrial assets look set to moderate compared with our previous reports, suggesting that the market has moved towards a more sustainable level of growth following the exceptional demand experienced in recent years.”
The outlook for prime retail is also positive with 64% of respondents expecting rental increases and 46% expecting capital value growth. They specifically noted the strong performance of certain formats, such as convenience stores, retail parks and businesses in prime locations.
However, just 15% of respondents expect the capital value of secondary retail to increase with the majority, 60% of respondents saying they expect them to remain the same. For rental increases, the figures are 22% with 55% saying they expect them to remain unchanged.
“The findings reflect improving sentiment towards selected retail formats and locations, supported by stronger occupier performance and renewed investor interest. However, secondary retail assets continue to face challenges, with respondents expecting limited rental growth and modest capital value decline” Hogan says.
Alternative real estate assets
Respondents continue to identify strong growth prospects across alternative real estate sectors, with positive expectations for both rental and capital value performance over the next 12 months.
The outlook is particularly positive for data centres, aged care facilities, and student housing, reflecting structural demand drivers and long-term investment themes supporting these sectors. The expectation of rental growth across these sectors may be influenced by continued demand pressures arising from demographic change, housing requirements, digital infrastructure needs, and changing patterns of service provision.
Hogan says care facilities and student accommodations continue to benefit from strong underlying demand, while data centres remain supported by the growth of digital services and increased requirements for technological infrastructure.
“The positive outlook for alternative assets also reflects their increasing importance within institutional investment strategies, as investors seek assets offering long-term income stability and diversification beyond traditional commercial property sectors.”
Future Trends
A majority, 58% of respondents, anticipate some reduction in businesses’ office real estate footprints, although the expected reductions are generally modest. However, respondents also expect demand to become increasingly concentrated in higher quality buildings, with occupiers prioritising sustainability, employee wellbeing and workplace performance.
Meanwhile 42% do not anticipate any reduction in office footprints, indicating that occupiers continue to recognise the importance of physical workplaces.
This suggests that businesses are more likely to optimise and consolidate office space rather than undertake significant reductions in their real estate requirements. Hogan says it also helps to explain continued positive expectations for prime office rents and capital values despite evolving workplace strategies.
The full report is available at scsi.ie or on request.
